compelled to resort first to the parcel not covered by the inferior lien, in order to leave the other, so far as possible, to the second lienor, and the latter is, in case the prior mortgagee does proceed against such other land in the first place, entitled to be subrogated to the rights of the prior mortgagee against the land covered by the first mortgage only, this being an application of the general equitable principle that one having two funds to satisfy his demands shall not, by his election, disappoint a person who has only one fund.384 The principle will not be applied, however, if it will in any way prejudice the first mortgagee, the mortgagor, or third perBons. 385

547. Merger of mortgage.

The principle that, if the owner of the legal estate in the land becomes also the owner of a charge or lien thereon, the latter will be merged or extinguished, is frequently applied in the case of mortgages. Equity, however, applies the principle only when it accords with the actual or presumed intention of the parties.338 This intention may be expressly stated in the conveyance of the land or the assignment of the incumbrance which brings the two interests together, or may be made apparent by the acts of the parties or the character of the conveyance, or the circumstances under which the conveyance is made.337 When there is, as is frequently the

884 3 Pomeroy, Eq. Jur. § 1414; Aldrich v. Cooper, 2 White & T. Lead. Cas. Eq. 228, notes; Hannah v. Carrington, 18 Ark. 85; Andreas v. Hubbard, 50 Conn. 351; White v. Polleys, 20 Wis. 505; Abbott v. Powell, 6 Sawy. 91, Fed. Cas. No. 13; Cheesebrough v. Millard, 1 Johns. Ch. (N. Y.) 409, 7 Am. Dec. 494; Brooks v. Maltledge, 100 Ga. 367; Ball v. Setzer, 33 W. Va. 444.

335 Hudkins v. Ward, 30 W. Va. 204, 8 Am. St. Rep. 22; Boone v. Clark, 129 Ill. 466; McGinnis' Appeal, 16 Pa. St. 445; Detroit Sav Bank v. Truesdail, 38 Mich. 430; 3 Pomeroy, Eq. Jur. § 1414.

336 2 Pomeroy, Eq. Jur. §§ 789-795.

887 See Longfellow v. Barnard, 58 Neb. 612, 76 Am. St. Rep. 117;

case, nothing to show the intention, in such a case equity will usually presume that the owner of the two interests intended that they should merge, or the contrary, according as merger would be most for his benefit.338 In case there is an incumbrance or equity intervening between the mortgage and the estate of the owner of the property, as, for example, when there is a second mortgage, it will be presumed that the owner of the premises and of the first mortgage did not intend that his mortgage should be merged in his estate in the land, since the effect of such merger would be to accord priority to the second mortgage or other intervening incumbrance,389

Merger does not result when the mortgage is assigned to one of two or more tenants in common of the mortgaged premises ;340 nor, under the modern statutes giving married

Agnew v. Charlotte, C. & A. R. Co., 24 S. C. 18, 58 Am. Rep. 237; Gresham v. Ware, 79 Ala. 192; Goodwin v. Keney, 47 Conn. 486; Smith v. Roberts, 91 N. Y. 470; Campbell v. Knights, 24 Me. 332; Matthews v. Jones (Neb.) 66 N. W. 622.

The expressed or implied intention which controls is, it seems, that existing at the time the two estates come together, and not that which may be afterwards formed. Given v. Marr, 27 Me. 212; 2 Pomeroy, Eq. Jur. § 792.

838 Factors' & Traders' Ins. Co. v. Murphy, 111 U. 8. 738; Adams v. Angell, 5 Ch. Div. 634; Mallory v. Hitchcock, 29 Conn. 127; Clark v. Glos, 180 Ill. 556, 72 Am. St. Rep. 223; Bullard v. Leach, 27 Vt. 491; Den d. Van Wagenen v. Brown, 26 N. J. Law, 196; Watson v. Dundee Mortgage & Trust Inv. Co., 12 Or. 474; Birke v. Abbott, 103 Ind. 1, 53 Am. Rep. 474; Patterson v. Mills, 69 Iowa, 755; Knowles v. Lawton, 18 Ga. 476, 63 Am. Dec. 290; Huat v. Hunt, 14 Pick. (Mass.) 374, 25 Am. Dec. 400; James v. Morey, 2 Cow. (N. Y.) 246, 14 Am. Dec. 475; Duncan v. Drury, 9 Pa. St. 332, 49 Am. Dec. 565; Aetna Life Ins. Co. v. Corn, 89 Ill. 170; Silliman v. Gam mage, 55 Tex. 365.

339 Lowman v. Lowman, 118 Ill. 582; Stantons v. Thompson, 49 N. H. 272; Duffy v. McGuiness, 13 R. I. 595; Hanlon v. Doherty, 109 Ind. 37; Denzler v. O'Keefe, 34 N. J. Eq. 361; Ryer v. Gass, 130 Mass. 227.

340 Titsworth v. Stout, 49 Ill. 78, 95 Am. Dec. 577; Barker v. Flood 103 Mass. 474

women control of their real estate, does the fact that the owners of the mortgage and the mortgaged property are husband and wife cause a merger.

841

A merger will always be enforced when to keep the mortgage alive would involve a fraud or wrong upon some innocent party, since equity undertakes to prevent a merger only when this is necessary for purposes of justice.342 There is necessarily a merger if an owner of the mortgaged land, who is under an obligation to pay the debt, acquires the title to the mortgage, since he cannot keep the mortgage alive to the prejudice of other persons;843 and in such a case, ever if he takes an assignment of the mortgage, the mortgage is extinguished.344

VI. FORECLOSURE.

The right to foreclose accrues upon the breach of a condition of the mortgage as ascertained by the terms of the mortgage, or of the instrument secured thereby, or both.

In the absence of a statute expressly naming the period within which suit to foreclose may be brought, the limitation period

341 Bean v. Boothby, 57 Me. 295; Power v. Lester, 23 N. Y. 527; Bemis v. Call, 10 Allen (Mass.) 512.

342 Andrus v. Vreeland, 29 N. J. Eq. 394; Miller v. Whelan, 158 Ill. 555; Gardner v. Astor, 3 Johns. Ch. (N. Y.) 53, 8 Am. Dec. 465; 2 Pomeroy, Eq. Jur. § 794.

348 Mickles v. Townsend, 18 N. Y. 575; Brown v. Lapham, 3 Cush. (Mass.) 551.

344 Jones ▼. Lamar, 34 Fed. 454; Bunch v. Grave, 111 Ind. 351; Brown v. Lapham, 3 Cush. (Mass.) 554; Russell v. Pistor, 7 N. Y. 171, 57 Am. Dec. 509; Lilly v. Palmer, 51 Ill. 331; Theisen v. Dayton, 82 Iowa, 74; Burnham v. Dorr, 72 Me. 198; Frey v. Vanderhoo, 15 Wis. 436.

One who has conveyed the mortgaged premises with a covenant against incumbrances cannot pay off the mortgage and take an assignment, or otherwise keep it alive, in direct violation of his cove‐ nant. Jones v. Lamar (C. C.) 34 Fed. 454; Mickles v. Townsend, 18 N. Y. 575; Butler v. Seward, 10 Allen (Mass.) 466.

applicable to actions to recover land is adopted in equity. In the majority of states, the right to foreclose is not affected by the fact that the personal remedy on the obligation secured is barred by the statute of limitations.

Foreclosure in this country is usually by means of an equitable proceeding to obtain a sale of the land, and payment from the proceeds of the obligation secured. The same end is frequently attained by a sale under a power in the mortgage, without any judicial proceeding. In most of the New England states foreclosure is usually by entry or writ of entry, which gives the mortgagee the land itself, as in the "strict foreclosure" of equity, now but seldom employed outside of one or two states. Scire facias is, in one state, the recognized mode of foreclosure The personal liability of the mortgagor can be enforced only by a distinct action at law, except in those states where a decree for a deficiency is by statute allowed in the foreclosure proceeding.

548. Accrual of the right to foreclose.

Foreclosure is the proceeding by which a mortgagor or other owner of an interest in the land is, upon his failure to comply with the stipulations of the mortgage or of the instrument secured thereby, deprived of his right to discharge the land from the lien of the mortgage.345

The right to foreclose the mortgage accrues upon a noncompliance with a stipulation, the performance of which the mortgage is intended to secure, and not before.346

Usually, the mortgage, or the instrument secured thereby, provides that a default in the payment of an installment of principal or interest shall cause the whole principal to immediately become due, at the mortgagee's option, thus au

845 Though we usually speak of the "foreclosure of a mortgage," what is really foreclosed is the right to redeem or discharge the mortgage. See Shepard v. Richardson, 145 Mass. 32.

846 See Trayser v. Trustees of Indiana Asbury University, 39 Ind. 556; James v. Fisk, 9 Smedes & M. (Miss.) 144, 47 Am. Dec. 111.

thorizing a foreclosure for the whole amount upon such a default.847 The institution of a suit to foreclose for the whole amount is regarded as a sufficient exercise by the mortgagee of such an option, without any previous declaration by the mortgagee of his desire that the total principal be considered due.348

There may be, by express stipulation, a right to foreclose upon the mortgagor's failure to pay taxes on the land,849 or upon any other default by the mortgagor, as in the payment of insurance, which is calculated to affect the security. A demand of performance after default is not necessary before beginning suit to foreclose.350

549. Bar by lapse of time.

The time within which a suit to foreclose a mortgage must be brought is sometimes expressly named in the statute.351 In the absence of such a provision, equity has usually adopted the period necessary to bar a legal action to recover land, as

847 Bushfield v. Meyer, 10 Ohio St. 334; Adams v. Essex, 1 Bibb (Ky.) 149, 4 Am. Dec. 623; Noyes v. Anderson, 124 N. Y. 175; Schooley v. Romain, 31 Md. 574, 100 Am. Dec. 87; Atkinson v. Walton, 162 Pa. St. 219; Parker v. Banks, 79 N. C. 480; Brown v. McKay, 151 III. 315; Baldwin v. Van Vorst, 10 N. J. Eq. 577; Noell v. Gaines, 68 Mo. 649; Fletcher v. Daugherty, 13 Neb. 224; Buchanan v. Berkshire Life Ins. Co., 96 Ind. 510; Heath v. Hall, 60 Ill. 344. And the statute in a number of states expressly authorizes foreclosure for the whole on nonpayment of an installment. 1 Stimson's Am. St. Law, § 1929.

348 Hewitt v. Dean, 91 Cal. 5; Brown v. McKay, 151 Ill. 315; Buchanan v. Berkshire Life Ins. Co., 96 Ind. 510; Lowenstein v. Phelan, 17 Neb. 429; Atkinson v. Walton, 162 Pa. St. 219; Dunton v. Sharpe, 70 Miss. 850. Compare Schoonmaker v. Taylor, 14 Wis. 313; English v. Carney, 25 Mich. 178.

843 Pope v. Durant. 26 Iowa, 233; Condon v. Maynard, 71 Md. 601; Stanclift v. Norton, 11 Kan. 218; 2 Jones, Mortgages, § 117.

350 Ferris v. Spooner, 102 N. Y. 10; Clemens v. Luce, 101 Cal. 432. 851 1 Stimson's Am. St. Law, § 1928; Wood, Limitations, § 223; & Dembitz, Land Titles, § 189.